Quinn's budget speech could set stage for 'ugly year'

Three weeks ago, many lawmakers came away from Gov. Pat Quinn's State of the State speech wishing he had talked in more detail about state finances.

They should get over that feeling Wednesday.

Quinn is scheduled to deliver his proposed budget for the 2013 fiscal year that begins July 1 in a noon speech before a joint session of the General Assembly. Quinn has dropped broad outlines of many ideas he has in mind for trying to straighten out the state's finances. Now, he's supposed to flesh out the details.

"I think it's going to be just an ugly year. There's no money, the budget's going to need some big cuts," said Dan Long, executive director of the Commission on Government Forecasting and Accountability.

COGFA has a report out that includes the heading "A Grim Look Ahead to FY 2013." Among other things, the section notes that nearly all of the increased tax collections the state expects next year will be needed just to pay pension costs. It also says that "approximately $8 billion in unpaid bills will continue to put massive pressure on the state's financial condition."

More closures?

Lawmakers already know Quinn is flirting with an idea to move some downstate teacher pension costs to local school districts and away from the state.

However, Quinn also startled downstate lawmakers last week when he said his budget will include "quite a few" facility closures. Quinn made the remark on WBEZ radio in Chicago.

"This budget year will go forward with facility closures in a variety of places," Quinn said.

Lawmakers said late last week, though, that they don't know what the governor has in mind. The administration is already in the process of trying to close the Tinley Park Mental Health Center and the Jacksonville Developmental Center. Those two were on a list of seven facility closures Quinn tried to execute last fall. Also on that list was the Logan Correctional Center in Lincoln.

"I can't imagine he's going to go down the road of closing correctional facilities because we are overcrowded," said Sen. Larry Bomke, R-Springfield. "I felt that was an empty threat last fall."

Bomke noted that the closure plan for Logan called for moving inmates around and housing some of them in prison gymnasiums, which could pose security risks.

Rep. Rich Brauer, R-Petersburg, also was skeptical that Quinn would propose closing any adult prisons because they are significantly overcrowded. But he suggested the Democratic governor may be "politically motivated" to close facilities in Republican areas.

Bomke said it wouldn't be surprising if Quinn announced plans to close additional facilities for the mentally ill and developmentally disabled, with plans to move the residents to smaller, community-based settings.While Quinn is only trying to close two facilities now, his plan is to close four institutions over the next 2 1/2 years.

Pension plan

Quinn already has endorsed the idea of shifting the cost of downstate teacher pensions from the state to local school districts. Both House Speaker Michael Madigan, D-Chicago, and Senate President John Cullerton, D-Chicago, are amenable to the idea.

What Quinn hasn't done is spell out details of the plan, such as how much of the pension burden will be shifted to schools and how quickly. The less burden that is shifted and the longer the time to phase it in, the lower the initial costs will be to schools. Still, school districts are hotly opposed to having a state cost shifted to them at a time when state aid is also being cut.

The Springfield School District is estimating such a move could cost it as much as $20 million a year.

Quinn's also talked about reducing the annual cost-of-living increase granted to retirees in the state pension systems. Participants might be asked to contribute more to their pensions, too.

The governor's budget also is supposed to detail how he will meet his target of cutting $2 billion from Medicaid. Between state outlays and federal reimbursements, Medicaid is about a $15 billion annual program, and the costs keep climbing. About 87 percent of the state's general-fund budget is devoted to education and human services. All other state spending is covered from the remaining 13 percent.

Quinn wanted to cut Medicaid reimbursement rates for providers last year, but was blocked. However, no extra money was allocated to pay for services, which meant the state's bill backlog climbed by more than $1.5 billion.

None of Quinn's options is desirable. He can try again to cut rates, which medical providers oppose; he can recommend changing eligibility standards, throwing some recipients off the rolls; and he can do away with some optional services that federal regulators do not require the state to cover. However, those include things like dental services and prescription drugs.